So I just got this boring-looking piece of paper from my credit card company....

[funflower]

informing me that the "default rate" on the card is being raised to over 29%! Since I'm not very good about reading the fine print on these kinds of form letters, I didn't know what a "default rate" is. Turns out it's the rate they'll charge me if I'm so much as THREE DAYS late on more than ONE payment this year. Since I'm still among the gainfully employed, this just motivates me to be sure and get my bill paid on time. BUT, how many people do you think will be more than THREE days late more than ONCE this year? And how many people will be running up more than the usual amount of credit card debt after losing their jobs or taking a pay cut? When the fed is lending at 0%, it seems unconscionable that these people could charge such an exorbitant rate to Joe the ex-auto worker, who is now unemployed and might just be a few days late in paying his credit card bill. What is Congress for if not to rein in such practices? :mad: :mad: :mad:

[TwilightGardener]

1. You and I got the same letter. They also, at some point, jacked up

my regular rate to 23% (up from 14%, which in turn was up from a "low introductory rate"). My husband usually pays the bills, so I said: When the fuck did THIS happen? I don't use the card very much, don't usually keep a balance--not sure if it's better to just cancel it, or keep it so as to not affect my credit rating.

[truedelphi]

4. Cancel it. Once you start paying more than 15% you are a sucker.

The whole country is going belly up, so worrying all that much about your credit rating is strange.

Besides, once you cancel, you'll go back to getting more attractive offers. If there is one thing that credit cards cannot stand, it's knowing that some potential consumer out there does not have a credit card in their wallet.

[TwilightGardener]

7. As long as I don't carry a balance, I feel like I'm actually punishing them, in a way--

I think they wish I would cancel--they're not making much off of me. I'll have to think it over.

[truedelphi]

10. Read panader's post (blelow)

My experience with credit cards is that even when they screw up, you are the one stuck with the
$ 29 to 59 worth of penalties and late fees etc.

In today's economic climate, I don't think the "ding" of cancelling a credit card means anything.

Keep it only if you really really need it for car rentals etc on some vacation or trip you are planning.

[SoCalNative]

8. Don't cancel it

if you close your account it will reflect negatively on your credit/credit score. Even if you have a perfect record with that card/company.

Use the card once every month for a small purchase and pay the balance in full every month.

[CoffeeCat]

19. It's the credit-card companies who have sold us...

...this nonsense about our oh-so-important credit scores.

People live and die by their FICO score, and it really is a complete joke!

Do you have a mortgage and do you pay it on time? If so, you've got enough credit
to buy whatever the hell you want.

The FICO score is just one more way these criminals get their claws into us--and convince us that
we need to have credit cards and that we don't dare cancel those cards!! Oh no! Our credit
will be dinged!

They are playing us like used trumpets! Do not fall for this nonsense!

Pay your mortgage on time, and you will qualify for financing a car, another house, a boat---whatever! As
long as you have the income to back up the transaction.

As long as you have a relationship with these credit-card companies--they will find seven ways to screw you!
Even if you don't have a balance, they will find a way to get money out of you. This is not a game, people!
They want your money and they have hundreds of people devising ways to get at it!

Cut up those cards and cancel, otherwise you're choosing to allow loan sharks into your home.

[dixiegrrrrl]

20. Boy, You got that right.Here's what Discover did to us...

Mr. d. closed his Discover card in 2001.

There is letter you send when you close out a card, and in it you state how you want to the closed account to be reported to credit agencies, and that you want no further solicitations, plus you want a confirmation letter the account is closed.
We got confirmation letter.
We moved across country.

Last week he gets a letter from ....Discover.
Stating unless they hear from him within 30 days, they will have to regretfully close his account!

[Turbineguy]

2. It's the bank's way of helping people in tough times

Here's how it works: if you are late, the bank nearly triples your interest rate. They hope you then cannot pay at all. This means you are a toxic asset. They can then go to the government and demand money for executive bonuses.

It's a logical and expected solution formulated by people who caused this mess.

[funflower]

3. Well, I'm glad those geniuses learned something in business school.

But where the hell is Congress in all of this?

[Dervill Crow]

5. Got that same letter yesterday.

I think it said it would go up if I was ONE day late, though. Miserable leeches!

[panader0]

6. Last year I paid one of my cards to zero.

Or so I thought. Even though the bank employee assured me the card balance was zero, they neglected to add the last month's service fee. So two months later, when I became aware of the situation, I already had late penalties and my rate, even on purchases went to 27%. Because THEY screwed up. Grrr! I got rid of the card, after having several hundred in fees and added interest paid.

[ellisD]

9. Unemployment Insurance is Worthless

Back in May 2004 I was let go from the store I worked at due to slow business - at the time I had 3 visa cards, all with the "unemployment insurance" options where if you lose your job, you get something like a 3-6 month grace period on interest and payments... but of course when I actually needed this "insurance" I was quickly denied, and without even being given a clear reason (your application was rejected on the basis it does not meet Section 3 sub-paragraph b) clause 14 etc..)

After complaining several times to the clueless and unhelpful customer service operators, I finally started demanding all my insurance fees to be refunded as apparently they'd been milking me out of an extra $7 a month for a service I couldn't actually use - they told me they could not even consider refunding anything until my account (now overdrawn from a late fee) was paid in full and closed out!


I think Tyler Durden had the right idea lol

[TwixVoy]

11. I am sorry

you know I am usually against these institutions - but come " I didn't know what a "default rate" is"

You don't know what it means to default on an agreement? If you are being serious you should get some financial learning books because you with credit cards = sitting duck.

Instead of worrying about being late and not understanding what it means to default on a loan you should do your self a favor, call them up, and CLOSE THE ACCOUNT. Close ALL credit cards. They don't have your best interest in mind.

[funflower]

16. I'm not worried, and I'm not in "default". I do think a ton of people are likely to be

three days late on a payment a couple of times this year, and that hardly constitutes a "default" justifying imposition of usurious interest rates. I also think the credit card companies will make a fortune on desperate people who will run up debts, be "late" (by three days) on a few payments and find themselves with ridiculous interest rates that will make it impossible for them to keep up with their payments.

If you read the post, I think you'll see it's obvious that it's the fraudulent and predatory policy that I'm complaining about. What I personally do with my card has nothing to do with it. I can cut up my card and these companies will still make a fortune on the newly jobless this year. And their are criminals and Congress blesses their crimes.

[notesdev]

12. I know loan sharks

who would be embarrassed to charge a rate like that.

[aroach]

13. You get three whole days?

I get the lovely default rate if my payment gets there an hour late.

[notesdev]

14. I see the problem

The problem being that you have a financial instrument designed to enslave you in exchange for fleeting, temporary conveniences.

I recommend a scissor as the starting point to a solution.

[eridani]

15. Join a credit union, and if you must have a card, get one from them n/t

[Jeep789]

17. Why has no leader called for a boycott of he credit industry yet?

It seems obvious to me that nothing will change until the people demand it either by refusing (in large numbers) to pay their bills or refusing to partake in the credit game to begin with.

[Joanne98]

18. They're terrorists!